Airlines are still in talks with the Government about how to keep their services running as more and more routes get suspended.
Transport Minister Phil Twyford today announced where almost half of the $600 million aviation support package will go – largely covering Government fees and keeping air traffic service provider Airways operating.
About $163m will go to airlines to pay passenger-based charges used to help fund the Civil Aviation Service, Aviation Security Services, Customs, and biosecurity. And another $37m of support will cover fees paid to state-owned service Airways.
The Government will freeze any price hikes by agencies that charge fees at the border, and will also throw $70m behind Airways.
"This package will see the Government temporarily fund these services while airlines experience customer decline," Twyford said in a statement.
"We are also committing to working with the sector and the CAA to ensure there is no red tape stopping airlines ramping up services back when international conditions improve."
The Board of Airlines Representatives of New Zealand – which represents the carriers – said the announcement was a welcome first step from the Government.
"BARNZ is continuing to meet with Government to discuss the crisis that has seen on average 80 per cent of flights cancelled," chief executive Justin Tighe-Umbers said.
Air New Zealand said it "welcomes the Government's efforts to support the aviation sector as it grapples with the devastating economic impact of Covid-19.
"Aviation is a cornerstone to ensuring social and economic connections to, from and within New Zealand.
"Minimising the costs the aviation sector incur at this time is vital to ensuring the long-term viability of aviation in New Zealand."
The airlines upped the ante today with Air New Zealand bringing forward the suspension of its Argentina service with immediate effect.
It also brought forward the closure of its London cabin crew base of 130 flight attendants to this weekend, having previously signalled it would withdraw from the Los Angeles-London route in October.
The national carrier has already said it expects to lay off up to a third of its staff as global restrictions on movement erode its revenue.
Australia's Qantas Airways today suspended all international flights from Australia starting at the end of the month, and cutting domestic capacity by 60 per cent.
For its Jetstar New Zealand service, that cuts Auckland-Christchurch and Wellington-Christchurch routes to 14 return services a week from 42. Auckland-Dunedin, Auckland-Queenstown and Wellington-Queenstown have been suspended.
Virgin Australia yesterday suspended all international routes, such as its trans-Tasman service.
The Government's aviation package is aimed as supporting the wider sector and protecting supply chains, and specifically excludes a bail out for Air New Zealand.
Finance Minister Grant Robertson said this week that the Government was still in talks with the airline.
Officials are also working on ways the Government can support larger and more complex firms that won't benefit from the $12.1 billion package announced on Tuesday.
E tu assistant national secretary Rachel Mackintosh said today's aviation announcement still left workers in the dark.
"It's responsible to take care of basic infrastructure, and the package should stop the industry grinding to a complete halt," Mackintosh said.
"Our priority is always working people, and we are looking forward to the specific support for our members from both the Government and the employers."